Congressional Briefing on Thailand’s Compulsory Licenses

On Friday, March 16 2007, Essential Action’s Director Robert Weissman was a panelist at a Capitol Hill briefing on Thailand’s recent compulsory licenses for two HIV/AIDS drugs and one heart disease medicine. The briefing was sponsored by Senator Sherrod Brown and Congressman Tom Allen. A summary of Weissman’s comments (based on notes prepared by Knowledge Ecology International) follow.
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Robert Weissman (a graduate of Harvard Law School and occasional adviser to the World Health Organization on intellectual property law) explained to the audience that the three compulsory licenses recently issued by Thailand are legal under Thai and international law, commendable from a public health perspective, and consistent with U.S. interests.

Weissman commenced by referring to the relevant sections of the WTO TRIPS Agreement and the Doha Declaration aloud (The relevant sections were also made available to attendees). “It is clear,” he said, that Thailand’s compulsory licenses were legal under these international norms. He pointed out that TRIPS places no restrictions on the grounds for which countries may issue compulsory licenses, a point specifically reiterated by the Doha Declaration on the TRIPS Agreement and Public Health. Weissman also noted that Article 31(b) of TRIPS clearly states that prior negotiations with patent holders are not required when patents are licensed for public non-commercial use. The licenses issued by Thailand are for public non-commercial use, and the private sector monopolies of the three pharmaceutical companies (Abbott, Merck and
Sanofi Aventis) remain protected. This is significant: the private sector, which serves higher income Thais and medical tourists, comprises 20% of the Thai market, and the Thai public health system primarily serves poor Thais who cannot afford to buy brand-name drugs.

Responding to earlier comments by Ronald Cass (President of Cass & Associates, former Reagan and H.W. Bush Administration trade official and former Dean of Boston University Law School) Weissman explained that that technology subject to compulsory licensing for non-commercial use may and typically is implemented by a for-profit contractor on the public’s behalf. Weissman cited the example of U.S. government use licenses of patented military technology. When the United States forces a patent owner to license its missile patent for public use, it doesn’t mean that the resulting missiles must be manufactured within the walls of the Pentagon. That would be impractical and defeat the purpose of the license. Instead, the U.S. contracts the work to a for-profit company like Boeing. Similarly, in Thailand, profit generating drug companies have been contracted to manufacture drugs for the Thai government’s non-commercial use.

Weissman’s then argued that Thailand’s compulsory licenses were to be applauded as a measure to expand access to treatment. Contrary to Cass’ claims, Weissman pointed to a Thai white paper that explains that Thailand will spend more on treatment as a result of the licenses, not less – as public funding will now be devoted to previously unaffordable drugs.

Weissman’s final point was that Thailand’s compulsory licenses are in America’s national interest. The United States is the world’s largest purchaser of AIDS drugs for developing countries through publicly funded programs like the President’s Emergency Plan For AIDS Relief (PEPFAR). PEPFAR relies on cheap generic drugs to achieve its treatment objectives, and the Thai licenses stand to further lower generic drug prices by expanding economies of scale, particularly for second line AIDS drugs. Without such cheaper second line drugs, either U.S. taxpayers will bear the burden of rapidly increasing costs, or PEPFAR will be forced to scale back its treatment objectives.